LEUVEN, Belgium — (BUSINESS WIRE) — March 6, 2018 — Materialise NV (NASDAQ: MTLS), a leading provider of additive manufacturing software and of sophisticated 3D printing services, today announced its financial results for the fourth quarter ended December 31, 2017.
Highlights – Fourth Quarter 2017
- Total revenue increased 42.1% from the fourth quarter of 2016 to 44,733 kEUR.
- Adjusted EBITDA increased 42.2% from 4,455 kEUR for the fourth quarter of 2016 to 6,334 kEUR.
- Net profit was 1,528 kEUR, or 0.03 EUR per diluted share, compared to 628 kEUR, or 0.01 EUR per diluted share, over the same period last year.
Executive Chairman Peter Leys commented, “2017 has been a good year for Materialise. Organically, our annual revenues grew by 16% to 132,600 kEUR and our Adjusted EBITDA grew by 38% to 13,100 kEUR, both at the high end of the range we forecasted at the beginning of the year. Importantly, our software revenues (including from our Materialise Medical segment) grew 18% year over year and our end part-related revenues (from our Materialise Manufacturing and Materialise Medical segments) grew 21%, underscoring the successful execution of our strategy of rolling out our software and services backbone, with a particular focus on end part manufacturing. Even more significant, 2017 was the year in which ACTech joined Materialise. This acquisition enabled us to post even more impressive growth rates of 24.5% in revenues and 60% in Adjusted EBITDA, and, more importantly, positions us exceptionally well in the promising market of unique complex metal parts.”
On October 4, 2017, we acquired ACTech, a full-service manufacturer of complex metal parts. As described in more detail below, the acquisition increased the scope of our Materialise Manufacturing segment's operations and had a significant impact on our results of operations for the fourth quarter of 2017 as well as the year ended December 31, 2017, resulting in increases to our revenues and operating expenses, among other items.
Fourth Quarter 2017 Results
Total revenue for the fourth quarter of 2017 increased 42.1% to 44,733 kEUR compared to 31,477 kEUR for the fourth quarter of 2016. Excluding the impact of the ACTech acquisition, revenue increased 10.5% to 34,768 kEUR. Total deferred revenue from annual software sales and maintenance contracts amounted to 18,723 kEUR at the end of the fourth quarter of 2017 compared 16,799 kEUR at the end of the fourth quarter of 2016. Adjusted EBITDA, which in the fourth quarter of 2017 excluded 343 kEUR of expenses related to the ACTech acquisition, increased to 6,334 kEUR from 4,455 kEUR, primarily as a result of the revenue contributed by ACTech. Excluding the impact of the ACTech acquisition, Adjusted EBITDA decreased slightly to 4,263 kEUR. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the fourth quarter of 2017 was 14.2% (12.3% excluding the impact of the ACTech acquisition) compared to 14.2% in the fourth quarter of 2016.
Revenue from our Materialise Software segment increased 29.6% to 10,468 kEUR for the fourth quarter of 2017 from 8,078 kEUR for the same quarter last year, boosted by original equipment manufacturer (“OEM”) sales growth of 46.7%. Segment EBITDA increased to 4,619 kEUR from 2,949 kEUR while the segment EBITDA margin was 44.1% compared to 36.5% in the prior-year period.
Revenue from our Materialise Medical segment increased 17.7% to 11,842 kEUR for the fourth quarter of 2017 compared to 10,061 kEUR for the same period in 2016. Compared to the same quarter in 2016, revenues from our medical software grew 9.9%, and revenues from medical devices and services grew 22.9%. Segment EBITDA was 2,158 kEUR compared to 656 kEUR while the segment EBITDA margin increased to 18.2% from 6.5 % in the fourth quarter of 2016.
Revenue from our Materialise Manufacturing segment increased 68.0% to 22,394 kEUR for the fourth quarter of 2017 from 13,326 kEUR for the fourth quarter of 2016. Segment EBITDA increased to 1,905 kEUR from 1,438 kEUR while the segment EBITDA margin decreased to 8.5% from 10.8% for the same quarter in 2016. In particular, ACTech contributed revenue of 9,965 kEUR and segment EBITDA of 2,071 kEUR (and segment EBITDA margin of 20.8%). Excluding the impact of the ACTech acquisition, revenue decreased 6.7% to 12,429 kEUR, and segment EBITDA decreased to (166) kEUR.
Gross profit was 24,048 kEUR, or 53.8% of total revenue, for the fourth quarter of 2017. Excluding the impact of the ACTech acquisition, gross profit was 21,421 kEUR, or 61.6% of total revenue, compared to 18,619 kEUR, or 59.2% of total revenue, for the fourth quarter of 2016.
Research and development (“R&D”), sales and marketing (“S&M”) and
general and administrative (“G&A”) expenses increased, in the aggregate,
32.8% to 24,553 kEUR for the fourth quarter of 2017 from 18,483 kEUR for
the fourth quarter of 2016. Excluding the impact of the ACTech
acquisition, operating expenses increased, in the aggregate, 19.1% to
22,017 kEUR. R&D expenses increased from 4,161 kEUR to 5,535 kEUR while
S&M expenses increased from 9,506 kEUR to 9,711 kEUR, and G&A expenses
increased from 4,816 kEUR to 6,771 kEUR, primarily representing
non-recurring expenses, including 343 kEUR related to the acquisition of